How the Average Independent Pharmacy Wastes $100,000 a Year
Saving independent pharmacies money and time by offering a free tool for comparing drug costs from multiple wholesalers at one time is our top priority at TRxADE. We see it as a way to help you regain control of your independent pharmacy.
I like to keep tabs on how much you can save by purchasing 10-20% of your pharmaceuticals on the TRxADE marketplace. In November, I showed how obsolete ordering systems were costing independent pharmacies a tremendous amount of money. Months later, that blog article is still one of our most read.
However, looking back on that article, it is clear that I had grossly underestimated how much money independent pharmacies waste each year.
How Much the Average Pharmacy Spends on Drug Inventory
According to NCPA’s 2013 Financial Digest, the average independent pharmacy had $232,118 in prescription inventory at any given time and turned that inventory 12.6 times over the course of a year. That means the AVERAGE independent pharmacy was spending $243,723.90 per month on prescription inventory.
We know that, since then, both brand name and generic drugs have become more expensive. Since I can’t predict exactly how much your independent pharmacy is spending on drugs each month, I created the table below using the likely cost savings available through TRxADE at three monthly cost points: $250,000, $300,000, and $350,000.
|
Avg Monthly Drug
Inventory Costs |
% Purchased from
Primary Supplier |
% Purchased via
TRxADE |
8% Savings
|
14% Savings
|
20% Savings
|
|||
|
Monthly
|
Annually
|
Monthly
|
Annually
|
Monthly
|
Annually
|
|||
| 250,000 | 90% | 10% | 2,000 | 24,000 | 3,500 | 42,000 | 5,000 | 60,000 |
| 250,000 | 85% | 15% | 3,000 | 36,000 | 5,250 | 63,000 | 7,500 | 90,000 |
| 250,000 | 80% | 20% | 4,000 | 48,000 | 7,000 | 84,000 | 10,000 | 120,000 |
| 300,000 | 90% | 10% | 2,400 | 28,800 | 4,200 | 50,400 | 6,000 | 72,000 |
| 300,000 | 85% | 15% | 3,600 | 43,200 | 6,300 | 75,600 | 9,000 | 108,000 |
| 300,000 | 80% | 20% | 4,800 | 57,600 | 8,400 | 100,800 | 12,000 | 144,000 |
| 350,000 | 90% | 10% | 2,800 | 33,600 | 4,900 | 58,800 | 7,000 | 84,000 |
| 350,000 | 85% | 15% | 4,200 | 50,400 | 7,350 | 88,200 | 10,500 | 126,000 |
| 350,000 | 80% | 20% | 5,600 | 67,200 | 9,800 | 117,600 | 14,000 | 168,000 |
Of course, how much independent pharmacies spend on pharmaceuticals each month varies by a wide margin. Some spend under $100,000 a month, while others top $1 million monthly.
But looking at these figures for the average pharmacy, it’s easy to see that independent pharmacies that haven’t joined TRxADE or aren’t using it as much as they could are paying a lot more for drugs than they need to.
How about you?
TRxADE Savings Calculator
To make it easy for you to see exactly how much you could be saving on TRxADE, I have created a very simple TRxADE Cost Savings Calculator. Click the link below to download it.
TRxADE Cost Savings Calculator
To use the calculator, simply:
- Enter your average monthly prescription inventory cost in the far left column. You may need to first click the Enable Editing button at the top of the page.
- Click any place outside of that field
- The rest of the numbers will adjust to show your savings
This is an Excel spreadsheet, so you must have Microsoft Excel in order to use the calculator.
Help Other Independent Pharmacies Regain Their Financial Independence
NCPA estimates there are now 22,814 independent pharmacies in the United States. More than 10% of them have joined TRxADE. This is a great start, but in order for there to continue to be a thriving community of independent pharmacies, more must start saving money on drug purchases.
Who do you know that should be taking advantage of the savings available at TRxADE? Use the sharing buttons below to spread this story on social media.
Together, we will win the fight for lower drug prices and a nation of thriving community pharmacies.
We consider ourselves savvy inventory managers, TRxADE most definitely helps with our efforts. When refusing to turn over invoices to compare pricing models we were downgraded by our primary wholesale outlet and had our brand rebate readjusted due to our shift in generic purchases.
We are told that insurance contracting should be our focus, not purchasing… we should settle for a 22% rebate on generic purchases and a 5% for brand. Hog wash! If using TRxADE didn’t hurt the primary outlet they wouldn’t penalize our brand rebate nor use roc scores to determine rebates.
We turned the table and asked to have a mock order invoice set up so we could enter our own purchasing data for one month to determine what rebates would be issued and just how much our cost would be with the primary wholesaler vs. our current TRxADE model. No reply… we have been stalled by our primary outlet! The even more disturbing notion is one of the secondary outlets (that sells on TRxADE) is owned by our primary source and the prices listed in TRxADE trumps our primary distributor! Sick!
Stay the course fellow independents! It is worth the time to log on and compare on TRxADE! Refuse to swallow the primary distributor’s pill of price deception.
Brett thank you for sharing and supporting Trxade! Great response & testimonial to our efforts. THANK YOU again!